Ordinance to amend Insolvency and Bankruptcy Code gets President's nod

New Delhi, Nov 24 (KNN) To prevent the defaulters from bidding and gaining access to the distressed assets without payments to lenders and President Ram Nath Kovind on Thursday passed an ordinance amending the insolvency and Bankruptcy Code (IBC).

The government said that the main purpose of the ordinance is prevention of the backdoor entry of promoters into the companies without paying the banks and prevention of associates and personal guarantors from bidding.

It would prevent the 'unscrupulous', undesirable persons from misusing the provisions of the IBC and would promote the sale of distressed assets to global investors.

The law would encourage  foreign and domestic investors to participate in the bidding process of weary assets as they were earlier concerned about the promoters intrusion.

Under the ordinance, promoters would not be able to regain access to the company without taking part in resolution process and without converting their non performing   assets to performing ones.

The amendment has been targeted at wilful defaulters non-compliant promoters. Among those ineligible to bid are those who have had their accounts classified as non-performing assets (NPAs) for one year or more and unable to settle overdue amounts including interest and charges before submission of the resolution plan. (KNN/AG)